CHT — Call Transcript 2022

Mar 1, 2022

4Q 2021 Operating Results

JPMorgan Taiwan CEO-CFO Conference
February 21, 2022 – February 22, 2022
Teleconference

Notes:

Thank you. This is Angela Tsai, Director of Investor Relations for Chunghwa Telecom. Welcome to our fourth quarter 2021 results conference call. Joining me on the call today are Harrison Kuo, our President, and Vincent Chen, our Chief Financial Officer.

During today’s call, management will begin by providing an overview of our business from this quarter, followed by a discussion of operational and financial highlights. After, we will move on to the question and answer portion of the call.

On slide 2, please note our safe harbor statement.

Now, I will turn the call over to President Kuo. President Kuo, please go ahead.

Disclaimer

STATEMENT REGARDING UNAUDITED FINANCIAL INFORMATION

The unaudited financial information under T-IFRSs in this presentation is preliminary and subject to adjustments and modifications. Adjustments and modifications to the financial statements may be identified during the course of the audit /review work, which could result in significant differences from this preliminary unaudited financial information.

NOTE CONCERNING FORWARD-LOOKING STATEMENTS

This presentation contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Statements that are not historical facts, including statements about Chunghwa’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Investors are cautioned that actual events and results could differ materially from those statements as a result of a number of factors including, but not limited to the risks outlined in Chunghwa’s filings with the U.S. Securities and Exchange Commission on Forms F-1, F-3, 6-K and 20-F, in each case as amended. The forward-looking statements in this presentation reflect the current belief of Chunghwa as of the date of this presentation and Chunghwa undertakes no obligation to update these forward-looking statements for events or circumstances that occur subsequent to such date, except as required under applicable law.

This presentation is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer or selling security holder and that will contain detailed information about the company and management, as well as financial statements.

SPECIAL NOTE REGARDING NON-GAAP FINANCIAL MEASURES

A body of generally accepted accounting principles is commonly referred to as "GAAP". A non-GAAP financial measure is generally defined by the SEC as one that purports to measure historical or future financial performance, financial position or cash flows but excludes or includes amounts that would not be so adjusted in the most comparable U.S. GAAP measure. We disclose in this report certain non-GAAP financial measures, including EBITDA. EBITDA for any period is defined as consolidated net income (loss) excluding (i) depreciation and amortization, (ii) total net comprehensive financing cost (which is comprised of net interest expense, exchange gain or loss, monetary position gain or loss and other financing costs and derivative transactions), (iii) other expenses, net, (iv) income tax, (v) cumulative effect of change in accounting principle, net of tax and (vi) (income) loss from discontinued operations.

In managing our business we rely on EBITDA as a means of assessing our operating performance. We believe that EBITDA can be useful to facilitate comparisons of operating performance between periods and with other companies because it excludes the effect of (i) depreciation and amortization, which represents a non-cash charge to earnings, (ii) certain financing costs, which are significantly affected by external factors, including interest rates, foreign currency exchange rates and inflation rates, which have little or no bearing on our operating performance, (iii) income tax and tax on assets and statutory employee profit sharing, which is similar to a tax on income and (iv) other expenses or income not related to the operation of the business.

EBITDA is not a measure of financial performance under U.S. GAAP or T-IFRSs. EBITDA should not be considered as an alternate measure of net income or income from operations, as determined on a consolidated basis using amounts derived from statements of operations prepared in accordance with U.S. GAAP or T-IFRSs, as an indicator of operating performance or as cash flows from operating activity or as a measure of liquidity. EBITDA has material limitations that impair its value as a measure of a company's overall profitability since it does not address certain ongoing costs of our business that could significantly affect profitability such as financial expenses and income taxes, depreciation, pension plan reserves or capital expenditures and associated charges. These non-GAAP measures are not in accordance with or an alternative for GAAP financial data, the non-GAAP results should be reviewed together with the GAAP results and are not intended to serve as a substitute for results under GAAP, and may be different from non-GAAP measures used by other companies.

Notes:

“Rise on Together, 2021” strategic transformation

3 years of consecutive growth in
EBITDA Margin, Net Income and EPS
IDC Revenue CAGR 5%

Cloud Revenue CAGR 5%

ICT Gross Profit
CAGR 17%
Mobile Service Revenue
Turn around
Broadband Revenue CAGR 2%

Mobile Churn Rate
1.52% (2019)
0.79%
(2021 vs. 2019)
Revenue Per Head 6%

Profit Per Head 15%

Core
Business
Emerging
Business

Cost
Optimization

Backbone Network.
100% SDN ready
FTTH Coverage 74%
NPS (eShop)+24.9
(2021 vs.2019)
NPS (Store)+11
Customer-centric Value Creation, commenced in 2019
Core
Competency

1

+

NCC, Speedtest, & OpenSignal
Recognized by

Notes:

Thank you, Angela, and hello, everyone. Welcome to our fourth quarter 2021 earnings call.
Before providing an update on fourth quarter performance, I would like to begin by highlighting the ongoing success of our strategic transformation that began in 2019.
Three years ago, we launched a customer-centric strategic transformation plan focused on value creation to enhance our market position. Under this plan, we sought to improve our competitive advantage by strengthening our core businesses, deploying emerging services, optimizing our cost structure and further enhancing fundamentals, such as next generation networks, IT infrastructure and human resource planning.
We concluded our three-year plan at the end of 2021 with several key achievements, including three years of consecutive growth in EBITDA margin, net income and EPS. Mobile service revenue turned around since the second quarter of 2021, and the churn rate significantly decreased from 2019 to 2021. In addition, the compound annual growth rate of broadband revenue increased by 2%, increasing the enhancement of our core business. In regards of emerging business, we are glad to see compound annual growth rate for both IDC revenue and cloud revenue increased by 5%, while ICT business gross profit increased to 17%. By 2021, our backbone network was 100% SDN ready and FTTH coverage reached approximately 74%, demonstrating our enhanced core competence. The Net Promoter Score of our services also increased, which reflects the increase in customers satisfaction. Revenue and profit per head increased 6% and 15% respectively, attributable to increased operational efficiency as a result of cost structure optimization.

Organizational transformation

Strategy
Expand IoT services over NB-IoT and Cat-M1 network
Offer diversified rate plans and product portfolio to satisfy customer demands
Enhance brand image
Strengthen subscriber retention and acquisition initiatives
Promote VAS and new applications
Grow enterprise customers revenues
Customer Centric
Focus on business competitiveness
Business Groups
Consumer
Enterprise
International
Technology Groups
Network Technology
Data Communications
Telecommunication Laboratories
Headquarters
Consumer, Enterprise and International Business Groups develop businesses under the customer-centric spirit
Focus on technology competitiveness
Network Technology Group, Data Communications Group and Telecommunication Laboratories serve to support  business development
Focus on
strategic competitiveness
Headquarters maximize functions of devising strategies and resource allocation
4

Notes:

Committed to Improving Shareholder Value

Cash Return
2021 AGM resolved to distribute NT$33.4 billion to shareholders
NT$4.306 per share
payout ratio 100%

NT$ bn
Note:
1 ADR = 10 common shares
The regular dividend has been calculated based on total share number 7,757,446,545.

Notes:

Business Overview

Notes:

Home Wi-Fi Devices

Penetration rate
≈ 20%
YoY 167%
•註：Mesh Wi-Fi：提供更廣的連結、結合高速寬頻，讓客戶在家享有極致聯網體驗，至6/30，付費的Home WiFi累計客戶數yoy成長120.9%(15373戶->33955戶)(備註1：若含基本型WiFi 0元客戶約250萬戶)(備註2：本資料由北分行銷處提供)

Home
Wi-Fi
(Mesh)
Mobile
Operational Strategies
Streamline services and strengthen profitability
Capitalize and remain at the forefront of digital convergence trends
Continue to invest in talent and R&D
Broaden corporate governance initiatives
Continue a customer-centric value creation transformation plan to move upward via strengthen core, deploy more, optimize cost and enhance fundamentals

Always Broadband Connected

Fixed Broadband
MOD
300Mbps ↑ Customers
ARPU and revenue
Online channel
access and transaction
YoY 45%

YoY 92%

Notes:

1.行動＋固網＋MOD+Mesh Wi-Fi三網齊上
2.300M客戶數 YoY +45%；家用付費Mesh WiFi裝置數 YoY +167%
3.HiNet用戶淨增數持續轉正；固網寬頻營收連續23個月正成長，12月營收創新高峰
4.5G用戶至4Q累計突破169萬戶；2022年滲透率預估達30%
5.iPhone 1399以上高資費佔比87.5%，高於去年同期(85%)。
6.5G999以上資費68%，1399以上資費39%；Q4續5G約平均月繳金額增加38.5%(665元→920元，iPhone 13帶動
7.5G基地台4Q累計超過12000座；2022年加速建設，年底暫估達16000座（不揭露）
8.MOD客戶數QoQ持平，YoY -0.4%；營收YoY +2.4%，全享包/頻道自選餐持續upsell
9.合併ICT毛利率(排除蘇花改/將來/彰濱等大案)，4Q20為17.0% vs. 4Q21為22.3%
Now, please turn to slide 6 for an overview of business from the fourth quarter of 2021.
In the fourth quarter, the mobile market in Taiwan remained steady as operators focused on 5G migration and development. By the end of 2021, our 5G penetration rate reached approximately 20%, and we expect this rate to reach 30% by the end of 2022. As we continued to lead in network quality by accelerating 5G deployment at better spectrum locations, we remain confident on 5G customer acquisition and reaching our target, maintaining our leading position in 2022.
In the fourth quarter, 5G migration continued to drive ARPU uplift. We observed an average of 39% uplift in monthly fees attributable to customers who renewed contracts to adopt 5G services, particularly from the contribution of iPhone 13 bundle subscribers.
Our excellent home-based infrastructure was well-received in the fourth quarter as well. The number of Home Wi-Fi devices continued to soar by 167% year over year. Broadband subscriber number turned positive during the quarter, while revenue hit a record-high in December. As subscriber migration to our broadband services of 300 Mbps or higher increased by 45% year-over-year, our broadband ARPU also continued to increase year-over-year, in line with expectations. MOD ARPU also grew on a year-over-year basis as a result of successful upsell during the quarter. Looking ahead, we will strive to develop video services by providing more popular content and leveraging 5G to create immersive viewing experiences.
We are pleased to announce our ICT business achieved its full-year revenue and margin by the end of 2021. In particular, the ICT project margin for 2021 continued to grow, which is reflective of our overall performance, and demonstrating that our enterprise business is on track and expected to do well in the future.

#1 Mobile Services Provider

1 Mobile Revenue (a)(b)(c)

1 Mobile Subscribers (c)

Chart

Category	#1 Mobile subscribers
CHT	0.361
TWM	0.24
FET	0.239
Other	0.16
Expand IoT services over NB-IoT and Cat-M1 network
Offer diversified rate plans and product portfolio to satisfy customer demands
Enhance brand image
Strengthen subscriber retention and acquisition initiatives
Promote VAS and new applications
Grow enterprise customers revenues

Chart

Category	#1 Mobile revenue
#1 Mobile revenue	0.389	0.389
Source: Company data,
MOTC and NCC statistics
Note :
a) Market share as of Nov. 2021
b) Revenues are based on T-IFRSs
c) Excluding IoT SIMs
Highest Subs & Lowest Churn(d)
Better Performance in Mobile Service Revenue
(Thousand)
(Billion)

Chart

Category	CHT	TWM	FET	CHT	TWM	FET
4Q20	15.6	11.85	11.98	-0.029	-0.047	-0.032
1Q21	15.69	11.76	11.93	-0.001	-0.018	-0.012
2Q21	15.84	11.78	12.07	0.028	0.007	0.017
3Q21	16.29	11.9	12.14	0.046	0.015	0.03
4Q21	16.36	12.02	12.27	0.048	0.015	0.024
(before IFRS 15 adoption)
revenue

Chart

Category	CHT	TWM	FET	CHT	TWM	FET
Jul-21	11568.686	7287.275	7047.868	0.0038	0.008442243200573317	0.0103
Aug-21	11678.677	7276.685	7052.6849999999995	0.0053	0.008729009569188751	0.0107
Sep-21	11739.959	7284.803	7050.346	0.0092	0.008782740925504755	0.0108
Oct-21	11839.244	7285.908	7053.052	0.0047227267931545264	0.009209495623184169	0.0112
Nov-21	11893.393	7283.136	7055.149	0.005390307127074633	0.00955652065333965	0.0116
Dec-21	11915.519	7270.226	7057.3550000000005	0.005153113593588943	0.010940278861730303	0.0113
Subscribers
(e)
Note :
d)Churn rate for postpaid subscribers
e)Excluding the one-time round-trip adjustment of IoT SIMs
Note : For TWM and FET, mobile service revenue is derived from mobile ARPU under Residual Value Method times the average subscriber number.

Notes:

Fixed Broadband Service

Strategy
Leverage network capability to offer high-speed upload service
Leverage Big Data capability for precision marketing and precision network construction
Leverage mobile, broadband and Wi-Fi capabilities to offer seamless internet services
Expedite CDN construction and OTT promotion to enhance digital convergence product competitiveness
Continue to execute the strategy of encouraging FTTx migration to 300Mbps or higher

Fixed Broadband Subs
Broadband Revenue
Fiber ≥ 300M
YoY 45 %
Continued ARPU growth for
9 consecutive quarters

Chart

Category	Broadband Access	Data Communications	ARPU
4Q20	4578.0	5416.0	733.0
1Q21	4559.0	5456.0	734.0
2Q21	4631.0	5535.0	742.0
3Q21	4697.0	5640.0	749.0
4Q21	4709.0	5650.0	755.0
ARPU( NT$)
4,358
4,348
4,363
4,339
4,354

Chart

Category	ADSL	Fiber (<100M)	Fiber (≥100M~<300M)	Fiber (≥300M)
Dec 20	0.167	0.43	0.3	0.1022317173150402
Mar 21	0.17	0.42	0.3	0.11106422519864545
Jun 21	0.16	0.41	0.31	0.12
Sep 21	0.15	0.4	0.31	0.14
Dec 21	0.153	0.386	0.312	0.148
Note1 : Broadband ARPU is calculated as access plus ISP
Note2 : Revenue is calculated based on T-IFRSs

Notes:

MOD/ IPTV Service

Strategy
Continue to enrich content, including movies, drama and TV series for SVOD
Leverage the existing broadband and 4G mobile subscriber base to grow MOD subscribers
Enhance MOD platform to carry OTTs and APPs to become the smart home hub
Facilitate MOD platform to be favorable for advertisements and marketing
Differentiate products by acquiring sports contents including eSports

Packaging SVODs ALL PASS
to enhance SVOD revenue

Chart

Category	MOD Subs	MOD Revenue
2Q20	2085.0	915.0
3Q20	2080.0	906.0
4Q20	2069.0	904.0
1Q21	2065.0	911.0
2Q21	2068.0	921.0
3Q21	2067.0	947.0
4Q21	2061.0	925.0
(NT$ mn)

Chart

Category	SVOD revenue
2Q20	246.0
3Q20	238.0
4Q20	232.0
1Q21	240.0
2Q21	250.0
3Q21	256.0
4Q21	259.0

Notes:

ICT Business

單位:億元	2021 Q4	2020 Q4	Q4 YoY	排除原因
合併營收
雲端	6.8	9.0	-24.4%
蘇花改		0.6		名不符實專案
將來銀行		1.1		五千萬以上大案
科盛科技		0.7		五千萬以上大案
雲端(排大案後)	6.8	6.6	3.3%

YoY
15.9%

Chart

Category	ICT Revenue
4Q20	130.3
1Q21	53.6
2Q21	57.5
3Q21	61.3
4Q21	109.6

YoY 22.1%

雲端
cloud services
YoY 3.3%

Excluding large project impact
YoY
20.2%

Chart

Category	ICT Revenue
4Q20	130.3
1Q21	53.6
2Q21	57.5
3Q21	61.3
4Q21	109.6
4Q20
Large projects
revenue

YoY 1.7%

Cyber Security
Note: Excludes impact of large projects

Notes:

Q4整體ICT營收109.6億，YoY -15.9%，主因去年同期有蘇花改、將來銀行、台電彰濱等大案及110年調整新加坡子公司國際語音營收歸類影響數；排除大案後YoY +20.2%。
Q4 IDC YoY +22.1%(開發金及中壽案)；021Q4 資安 YoY -1.7%，因部分大案延後入帳；Q4雲端YoY -7%，公雲營收雖成長，但雲端專標案入帳金額較少
Q4合併毛利率：IDC 32.9%、雲端22.1%、資安38.8%。
Q4整體ICT合併 margin為 26.6% vs.11.7% (4Q20)； ICT毛利總額YoY: 12M +25.6億元、Q4 +14.2億元
110年爭取Order Taking簽約營收達290.6億，超標128.8億，主要來自政府公營、資通訊、百貨及旅遊
打造全台第一座5G智慧鋼廠、建置5G開放網路驗測環境、打造全台第一座公車與緊急車輛優先號誌控制系統、協助中油公司及台電建立數據分析平台
110年5G企業專網成案64件，簽約含入帳金額10.5億(專網約3.9億/應用約6.6億)
Please turn to slide 10 for an update on our ICT business.
In the fourth quarter, both ICT project margin and gross profit increased year-over-year as a result of our efforts to take on projects with higher returns, which is positive to our overall bottom line.
Excluding the large project impact from last year, IDC revenue in the fourth quarter increased by 22% year-over-year, mainly due to revenue recognition from financial projects, and cloud revenue increased 3% year over year. Revenues from cybersecurity decreased year-over-year due to delays in project revenue recognition. However, we remain positive that the aforementioned business will grow at a double-digit rate in 2022.
In 2021, we were glad to see the 5G private network reach a billion-dollar value as a result of our recent efforts, such as introducing the first 5G smart steel factory in Taiwan. In addition, we were proud to report some indicative ICT projects, such as building the first bus emergency signal control system in Taiwan, big data analysis platforms for large public service companies, as well as the network test field for 5G O-RAN venders.
Looking ahead in 2022, we are pleased to see that the number of orders taken has exceeded our annual guidance, mainly attributable to opportunities from the government, enterprises, retail stores and the tourism industry.
Now, I would like to turn the call over to our CFO, Vincent Chen, who will review our financial results. Vincent, please go ahead.

Financials Overview

Notes:

Thank you, President Kuo, and hello, everyone. I will now walk through our third quarter financial results.

Financials: Income Statement Highlights

	Consolidated
(NT$bn)	Q4 2021	Q4 2020	Growth ?%	2021	2020	Growth ?%
Revenues	59.89	59.48	0.7	210.48	207.61	1.4
Operating Costs and Expenses	48.42	50.30	( 3.7)	165.18	166.84	(1.0)
Income from Operations	11.10	10.50	5.8	44.93	42.36	6.1
Net Income2	8.63	8.21	5.1	35.75	33.41	7.0
EPS	1.11	1.06	5.1	4.61	4.31	7.0
EBITDA	20.86	19.90	4.8	83.33	78.71	5.9
EBITDA Margin (%)	34.82	33.45		39.59	37.91
Note:
Financials are prepared in accordance with T-IFRSs. Figures for 2021 are unaudited.
Net income attributable to owners of the parent.
EBITDA = operating income + Depreciation & Amortization.
The calculation of growth rates is based on NT$mn.

Notes:

Financials: Business Segment Revenues

(NT$bn)	Q4 2021	Q4 2020	Growth %	2021	2020	Growth%
Domestic Fixed	18.12	20.24	(10.4)	64.78	69.47	(6.7)
Local	5.86	6.04	(3.0)	23.76	24.46	(2.8)
DLD	0.48	0.49	(1.4)	1.94	2.02	(3.7)
Broadband Access	4.71	4.58	2.9	18.60	18.14	2.5
MOD	0.93	0.90	2.3	3.71	3.64	1.9
ICT and Other Services	5.01	7.11	(29.6)	12.36	16.94	(27.0)
Mobile	27.20	24.96	9.0	95.25	90.23	5.6
Mobile Service Revenue	14.82	14.21	4.3	58.05	56.72	2.3
Sales of Mobile Handsets and Wearable Devices	11.52	10.30	11.9	35.41	32.11	10.3
ICT and Other Services	0.86	0.45	90.0	1.79	1.39	28.2
Internet	9.39	9.72	(3.4)	33.08	32.12	3.0
Data Communications	5.65	5.42	4.3	22.28	21.45	3.9
Application VAS	2.88	3.54	(18.7)	8.39	8.33	0.7
Services Provided to the government	0.85	0.76	12.7	2.41	2.34	3.0
International Fixed	2.64	2.14	23.7	9.10	8.70	4.6
ILD	0.51	0.55	(8.7)	2.15	2.48	(13.0)
Leased line	0.58	0.55	5.1	2.21	2.17	1.9
ICT and Other Services	0.73	0.24	203.3	1.41	0.89	58.4
Others	2.54	2.43	4.4	8.27	7.10	16.5
Total	59.89	59.48	0.7	210.48	207.61	1.4
Note:
Financials are prepared in accordance with T(IFRSs. Figures for 2021 are unaudited.
The calculation of growth rates is based on NT$ mn.
Businesses shown under each segment are highlighted; therefore, sum of the highlighted revenues is not equal to the total.

Notes:

Slide 13 provides a breakdown of revenue by business segment.
In the fourth quarter of 2021, total revenue increased by 0.7% year-over-year, mainly due to the increase in revenues from handset sales and mobile service revenue driven by the 5G migration and the iPhone 13 launch, as well as the increase of data communications revenue and broadband access revenue as a result of the demand of broadband speed upgrade amid the work-from-home trend and stay-at-home economy, which offset the decrease of ICT project revenue.
2021Q4營業收入為598.9億元，較去年同期增加4.1億元，YoY+0.7%。
行動銷貨收入較去年同期增加12.2億元，主因係iPhone 13上市導致iPhone手機銷量及平均單價增加，且神腦手機銷量增加所致。
行動服務收入較去年同期增加6.13億元，主因係積極推升5G業務、鞏固/Upsell既有客戶，月租營收變動數持續維持正值，帶動營收成長。
國際ICT及其他較去年同期增加4.9億元，主因係ST-2補償款(4.6億元)入帳。
行動ICT及其他較去年同期增加4.1億元，主因係NCC 5G網路建設補助款(4.3億元)入帳
數據網路收入較去年同期增加2.3億元，寬頻接取收入較去年同期增加1.3億元，主因係疫情使寬頻需求增加，防疫相關包裝銷售較預期佳、升速客戶持續增加。
國內ICT及其他較去年同期減少21.0億元，主因係去年同期有蘇花改案(22.0億元)入帳，基期較高。
市長話及國際網路收入較去年同期減少2.4億元，主因係市場競爭、免費通信軟體取代與國際電話來話量減少所致
未列於上表的營收包括：
    國內固定通信：國內電路出租(11.4億元)
    國際固定通信：國際智慧網路(6.4億元)、衛星通信(1.9億元)

Financials: Costs & Expenses

	Consolidated
(NT$bn)	Q4 2021	Q4 2020	Growth ?%	2021	2020	Growth %
Operating Costs	40.11	42.33	(5.2)	135.11	137.03	(1.4)
Operating Expenses	8.31	7.97	4.2	30.07	29.81	0.9
Marketing	5.84	5.51	6.0	21.09	20.96	0.6
General and Administrative	1.49	1.49	(0.4)	5.29	5.00	5.8
R&D Expense	0.98	0.97	1.2	3.69	3.85	(4.2)
Total	48.42	50.30	(3.7)	165.18	166.84	(1.0)
Note:
Financials are prepared in accordance with T-IFRSs. Figures for 2021 are unaudited.
The calculation of growth rates is based on NT$ mn.

Notes:

Financials: Cash Flow

	Consolidated
(NT$bn)	Q4 2021	Q4 2020	Growth ?%	2021	2020	Growth %
Net Cash Flow from Operating Activities	26.89	27.55	(2.4)	74.86	74.46	0.5
CapEx	12.30	9.48	29.7	35.33	23.51	50.3
Free Cash Flow	14.59	18.07	(19.3)	39.53	50.95	(22.4)
Cash and Cash Equivalents at the end of period	39.82	30.42	30.9	39.82	30.42	30.9
Note:
Financials are prepared in accordance with T-IFRSs. Figures for 2021 are unaudited.
The calculation of growth rates is based on NT$ mn.
Free cash flow is calculated by subtracting CapEx from Net Cash Flows from Operating Activities.

Notes:

Operating Results vs. Forecast

	Consolidated
(NT$bn)	Q4 2021?(A)	Q4 2021?（E）	Achieving ?%	2021 (A)	2021 (E)	Achieving ?%
Revenues	59.89	59.07~59.32	101.0~101.4	210.48	209.26~209.72	100.4~100.6
Operating Costs and Expenses	48.42	48.05~48.10	100.7~100.8	165.18	167.58~167.66	98.5~98.6
Income from Operations	11.10	11.20~11.65	95.3~99.1	44.93	41.72~42.51	105.7~107.7
Net Income2	8.63	8.67~9.41	91.7~99.5	35.75	32.60~34.09	104.8~109.7
EPS	1.11	1.12~1.22	91.7~99.5	4.61	4.20~4.40	104.8~109.7
EBITDA	20.85	20.73~21.18	98.5~100.6	83.33	79.90~80.65	103.3~104.3
EBITDA Margin (%)	34.82	35.10~35.70		39.59	38.18~38.46
Note:
Financials are prepared in accordance with T-IFRSs. Figures for 2021 are unaudited.
Net income attributable to owners of the parent.
EBITDA = operating income + Depreciation & Amortization.

Notes:

2022 Forecast

	Consolidated
(NT$bn)	2022（E）	2021	Growth ?%
Revenues	212.80~214.00	210.48	1.1~1.7
Operating Costs and Expenses	168.42~168.81	165.18	2.0~2.2
Income from Operations	44.55~46.08	44.93	-0.8~2.6
Net Income2	34.11~36.04	35.75	-4.6~0.8
EPS	4.40~4.65	4.61	-4.6~0.8
EBITDA	82.91~84.44	83.33	-0.5~1.3
EBITDA Margin (%)	38.96~39.46	39.59
Note :
Financials are prepared in accordance with T-IFRSs. Figures for 2021 are unaudited.
Net income attributable to owners of the parent.
The information therein is predictive and will not necessarily be fully realized in the future, and that reference to the company's significant accounting policy and summary of basic assumptions shall be made for further details.

Notes:

Effective and Efficient Capital Expenditure

Capital Expenditure
Budgeted CapEx for 2022- NT$36.8 bn
Mobile - NT$14.5 bn
Non-mobile –NT$ 22.3 bn

Continue to focus on core businesses for future investments in 5G,FTTx, IDC/Cloud and Submarine cable
NT$ bn
36.8
35.3
28.6
24.2
23.5

Note: Numbers or percentages are on cash basis.

Notes:

Awards and Recognition

Best 5G Service Provider in Taiwan
Winner of Speedtest “Fastest 5G ” and “Fastest Mobile Network” in Taiwan in Q3-Q4 2021
Winner of Opensignal “5G Download Speed” and “Fastest 5G Upload Speed,” as well as “5G Game Experience,” “5G Video Experience,” and “5G Voice App Experience”
Winner of Frost & Sullivan “2021 Taiwan Private 5G Network Customer Value Leadership Award” – the first and the only winner among Taiwan operators

Acknowledged ESG Practice and Corporate Sustainability
Awarded by The Asset (HK) with the Jade Award in The Asset ESG Corporate Award 2021
- the only Asian telecom operator to receive the top award
Awarded by Capital Finance International (UK) with Best Telecom Holding Governance - Asia 2021
Won multiple categories of 2021 Taiwan Corporate Sustainability Awards by Taiwan Institute for Sustainable Energy
Won 2021 Global Corporate Sustainability Awards by Taiwan Institute for Sustainable Energy in categories of English Sustainability Reports and Pandemic Response

Notes:

Thank you, Vincent.
Slide 19 illustrates our awards and recognitions from the fourth quarter, highlighting our distinction in mobile service, 5G speed and private 5G network service, as well as domestic and international recognition of our ESG practices and sustainable operations.
We are delighted to see our 5G services receive awards and accolades. The Speedtest recognized Chunghwa as the Fastest 5G and Fastest Mobile Network in Taiwan during the third and fourth quarters of 2021. Similarly, we achieved the fastest 5G download speed and upload speed and regarded as the best in user experience across gaming, video and voice app services in Taiwan.
As we aim to expand our 5G private network solutions to the Southeast Asian market, we appreciate the well-known international institute Frost & Sullivan for awarding us the best private 5G network for customer value leadership in Taiwan.
International institutes as well as those in Taiwan have acknowledged our ESG performance with top awards in the fourth quarter, which further encourages us on our endeavors. Going forward, we aim to leverage our telecom capabilities and carry out digital empowerment to help companies accomplish digital transformation, further achieving carbon footprint reduction.
Thank you for your attention. Now, I would like to open the floor for questions..

Q&A

Notes: